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You’ve already heard us screaming about how having accurate food costs is absolutely crucial to your profitability (and guess what? If you’re still using Excel or the back of a napkin to cost out your recipes, you DO NOT have accurate food costs and you desperately need to check out ReciProfity).

So now that you have all that great raw data, what do you do with it? If you’re calculating your selling price by multiplying the food cost of each item on your menu by 3.3 to get a 30% food cost, that’s a great starting point, but you’re still leaving lots of money on the table.

The key to profitability is making sure that your actual sales mix, and not just your menu,averages out to your taget food cost. If your menu averages out to a target 30% food cost but 80% of your sales come from items with a 40% food cost, that’s a problem.

It’s like having the fastest grill man in the city but a veg guy who’s just out of culinary school and can’t keep up. The whole line is going to be in the weeds. Similarly, an unbalanced menu will never maximize profits. Each item needs to work in concert with all other items to create a sales mix that just plows money into your pocket.

The trick is adjusting your prices based on your real sales mix every month (ReciProfity makes this really easy), not based on your static menu.

Here’s how to turn your menu into a serious money maker:

At the end of each month, print out a sales mix report and categorize every single menu item into one of the following categories based on its sales volume and profitability:

Look back at your Plowhorses. Are you sure that some of them aren’t actually Winners in disguise? If you’re selling Dover sole with beurre noisette for $45 and it costs you $17, that’s a pretty nasty looking 37% food cost. But that $28 gross profit is probably higher than most of your other items so that’s a pretty sweet sale to make. Since we take cash to the bank, not percentages, go ahead and put that bad boy in the Winners

Look at your high profit categories (puzzles and Winners). Do any of these items have obscenely high hidden costs associated with them that aren’t calculated as part of the food cost? An example is house-cured meats like pastrami that need 3 weeks in the fridge. The added electricity and cost of holding inventory can turn it into a low-profit item. This can also happen to items that require intensive prep relative to other items. Make sure these items are in the correct category.

Now let’s go through each category and see what we can do to optimize this menu:

Your Winners are what pay your rent. Your customers love them and they put money in your pocket. You probably don’t have to do too much with this category since right now they sell themselves. Just be careful that, as you jigger around the rest of your menu, the Winners don’t get hidden or you might see some of them turn into puzzles. This is why it’s important to repeat this process every month or whenever you change your menu.

Plowhorses bring customers through the door but you groan every time they’re ordered because all you see is a table full of people who aren’t really contributing to your bottom line. You can’t take them off the menu because your customers will rebel. But Plowhorses are a great opportunity. You can:

Up the price and turn it into a This works well in more expensive markets and higher-end businesses with a less price-conscious clientele.

Cut the food cost. Reduce the portion size or streamline the prep process. Just make sure this doesn’t mess up the product and turn it from a workhorse into a bum, or worse, turn off customers who come specifically for that product. Alternatively, eliminate waste (use ReciProfity to calculate differences between actual and ideal food cost to identify where the waste is), or find better prices from a new supplier.

Use it as a loss leader. You know that great bar a few blocks away that sells huge, delicious burgers for 6 bucks a piece? That burger isn’t actually making them any money, but it’s good enough to drag people in who then spend lots of money on high-margin items like sides and beer. That’s why the bar has a gorgeous copper draft system in full view with rotating microbrews on tap and why the waitresses push fries so aggressively. If this item is really what makes people beat a path to your business, don’t change it. Just accept that these items will be over your target food cost and need to be balanced out in your sales mix by other items with huge margins. Figure out what your “fries and microbrews” are and how to sell more of them (more on this in the Puzzles section).

If none of those tactics work, bury the item. Hide it in the middle of a group of other, more profitable items. It’s still there for customers who really want it but it won’t squeeze out the sales of your Winners and will free up prime menu real estate for your puzzles.

Puzzles are items that you wish you could sell more of. Coffee, desserts, cocktails, and appetizers are almost always considered puzzles since they have fantastic margins and you can always sell more of them without canceling out sales of other items. They’re most likely what’s keeping you in business, especially if some of your entrees are loss leaders. Other less pleasant puzzles are dishes that might be close to the chef’s heart but never really caught on with customers. Here’s what you want to do:

Have your floor staff push the items hard. This doesn’t mean that you’re turning your waitresses into used car salesman, just that you’re making it as easy as possible for your customers to spend more money. You’d be shocked how many customers won’t order a coffee after dinner until somebody suggests it. Make sure the waitress is that suggester. Don’t ask if the table would like dessert, just drop the dessert menus as soon as the table is cleared. Offer cocktails and aperitifs as soon as guests are seated. Point out the high-margin appetizers before the table has even started reading the entrees.

Check the item’s placement on the physical menu. Is it buried in the middle of a busy section on the periphery of the page? Switch it with a workhorse that’s hogging the spotlight. Put it in a box. Highlight it. Move it to the top left of the menu, where the eye goes first.

Rewrite the description. Remember that even though you know the dish inside and out, customers have no idea how it looks or tastes. All they know is what you tell them. Change “fried” to “crispy” and add some flowery adjectives if that’s your style.

Sometimes you just need to make it better. You might love the dish, but you might also be too close to it to be able to keep your opinion impartial. Don’t beat yourself up, we’ve all been there. Do a tasting for a few other restaurant people who you trust and use their honest feedback to improve the dish.

If all else fails, kill it. Lots of puzzles are very close to the chef’s heart, so this can hurt. But if you can’t sell the item, you just have ingredients taking up valuable fridge space and most likely contributing to waste. It’s irrelevant how much money this item could potentially make you if nobody’s buying it.

Losers are what nobody wants on the menu; not you, and not your customers.

There’s only one real tactic here: be ruthless and clean house.

The only reason to keep some of these Losers around is if they contribute to the business in a different way, like a hilariously named cocktail in a dive bar that makes the menu end up on Instagram or the only item for people with certain dietary restrictions, like McDonald’s Filet-o-fish.

This process might seem like a lot of work, but these techniques are what take your profitability to the next level. Avoid the temptation to just multiply food cost by 3.3 and you’ll leave your competition in the dust. Check out the reciProfity demo here to see how our new, cloud-based software makes you money and saves you time.

Menu Engineering Blog Post

You’ve already heard us screaming about how having accurate food costs is absolutely crucial to your profitability (and guess what? If you’re still using Excel or the back of a napkin to cost out your recipes, you DO NOT have accurate food costs and you desperately need to check out ReciProfity).

So now that you have all that great raw data, what do you do with it? If you’re calculating your selling price by multiplying the food cost of each item on your menu by 3.3 to get a 30% food cost, that’s a great starting point, but you’re still leaving lots of money on the table.

The key to profitability is making sure that your actual sales mix, and not just your menu,averages out to your taget food cost. If your menu averages out to a target 30% food cost but 80% of your sales come from items with a 40% food cost, that’s a problem.

It’s like having the fastest grill man in the city but a veg guy who’s just out of culinary school and can’t keep up. The whole line is going to be in the weeds. Similarly, an unbalanced menu will never maximize profits. Each item needs to work in concert with all other items to create a sales mix that just plows money into your pocket.

The trick is adjusting your prices based on your real sales mix every month (ReciProfity makes this really easy), not based on your static menu.

Here’s how to turn your menu into a serious money maker:

At the end of each month, print out a sales mix report and categorize every single menu item into one of the following categories based on its sales volume and profitability:

Look back at your Plowhorses. Are you sure that some of them aren’t actually Winners in disguise? If you’re selling Dover sole with beurre noisette for $45 and it costs you $17, that’s a pretty nasty looking 37% food cost. But that $28 gross profit is probably higher than most of your other items so that’s a pretty sweet sale to make. Since we take cash to the bank, not percentages, go ahead and put that bad boy in the Winners

Look at your high profit categories (puzzles and Winners). Do any of these items have obscenely high hidden costs associated with them that aren’t calculated as part of the food cost? An example is house-cured meats like pastrami that need 3 weeks in the fridge. The added electricity and cost of holding inventory can turn it into a low-profit item. This can also happen to items that require intensive prep relative to other items. Make sure these items are in the correct category.

Now let’s go through each category and see what we can do to optimize this menu:

Your Winners are what pay your rent. Your customers love them and they put money in your pocket. You probably don’t have to do too much with this category since right now they sell themselves. Just be careful that, as you jigger around the rest of your menu, the Winners don’t get hidden or you might see some of them turn into puzzles. This is why it’s important to repeat this process every month or whenever you change your menu.

Plowhorses bring customers through the door but you groan every time they’re ordered because all you see is a table full of people who aren’t really contributing to your bottom line. You can’t take them off the menu because your customers will rebel. But Plowhorses are a great opportunity. You can:

Up the price and turn it into a This works well in more expensive markets and higher-end businesses with a less price-conscious clientele.

Cut the food cost. Reduce the portion size or streamline the prep process. Just make sure this doesn’t mess up the product and turn it from a workhorse into a bum, or worse, turn off customers who come specifically for that product. Alternatively, eliminate waste (use ReciProfity to calculate differences between actual and ideal food cost to identify where the waste is), or find better prices from a new supplier.

Use it as a loss leader. You know that great bar a few blocks away that sells huge, delicious burgers for 6 bucks a piece? That burger isn’t actually making them any money, but it’s good enough to drag people in who then spend lots of money on high-margin items like sides and beer. That’s why the bar has a gorgeous copper draft system in full view with rotating microbrews on tap and why the waitresses push fries so aggressively. If this item is really what makes people beat a path to your business, don’t change it. Just accept that these items will be over your target food cost and need to be balanced out in your sales mix by other items with huge margins. Figure out what your “fries and microbrews” are and how to sell more of them (more on this in the Puzzles section).

If none of those tactics work, bury the item. Hide it in the middle of a group of other, more profitable items. It’s still there for customers who really want it but it won’t squeeze out the sales of your Winners and will free up prime menu real estate for your puzzles.

Puzzles are items that you wish you could sell more of. Coffee, desserts, cocktails, and appetizers are almost always considered puzzles since they have fantastic margins and you can always sell more of them without canceling out sales of other items. They’re most likely what’s keeping you in business, especially if some of your entrees are loss leaders. Other less pleasant puzzles are dishes that might be close to the chef’s heart but never really caught on with customers. Here’s what you want to do:

Have your floor staff push the items hard. This doesn’t mean that you’re turning your waitresses into used car salesman, just that you’re making it as easy as possible for your customers to spend more money. You’d be shocked how many customers won’t order a coffee after dinner until somebody suggests it. Make sure the waitress is that suggester. Don’t ask if the table would like dessert, just drop the dessert menus as soon as the table is cleared. Offer cocktails and aperitifs as soon as guests are seated. Point out the high-margin appetizers before the table has even started reading the entrees.

Check the item’s placement on the physical menu. Is it buried in the middle of a busy section on the periphery of the page? Switch it with a workhorse that’s hogging the spotlight. Put it in a box. Highlight it. Move it to the top left of the menu, where the eye goes first.

Rewrite the description. Remember that even though you know the dish inside and out, customers have no idea how it looks or tastes. All they know is what you tell them. Change “fried” to “crispy” and add some flowery adjectives if that’s your style.

Sometimes you just need to make it better. You might love the dish, but you might also be too close to it to be able to keep your opinion impartial. Don’t beat yourself up, we’ve all been there. Do a tasting for a few other restaurant people who you trust and use their honest feedback to improve the dish.

If all else fails, kill it. Lots of puzzles are very close to the chef’s heart, so this can hurt. But if you can’t sell the item, you just have ingredients taking up valuable fridge space and most likely contributing to waste. It’s irrelevant how much money this item could potentially make you if nobody’s buying it.

Losers are what nobody wants on the menu; not you, and not your customers.

There’s only one real tactic here: be ruthless and clean house.

The only reason to keep some of these Losers around is if they contribute to the business in a different way, like a hilariously named cocktail in a dive bar that makes the menu end up on Instagram or the only item for people with certain dietary restrictions, like McDonald’s Filet-o-fish.

This process might seem like a lot of work, but these techniques are what take your profitability to the next level. Avoid the temptation to just multiply food cost by 3.3 and you’ll leave your competition in the dust. Check out the reciProfity demo here to see how our new, cloud-based software makes you money and saves you time.

I had to fire one of my cooks recently. It was tough, because he’s a really smart young kid who’s been with me for almost 3 years. I’m not gonna lie, the way I handled this situation was a textbook example of how NOT to deal with a problem employee.

“K” had no kitchen experience when he started with me but his instincts and tirelessness immediately made him stand out. I started spending more and more time training him and quickly gave him more responsibility. He went from peeling onions to running the grill station in just a couple months and was happily cranking out hundreds of covers without breaking a sweat.

He became my go-to guy. He didn’t mind putting in the 16-18 hour days, carrying hundreds of pounds of food up 5 flights of stairs to a client’s event space, or keeping the newer guys in line. He knew all my recipes and all my quirks- exactly what size I like the tomatoes diced in our pico de gallo, exactly how strong I want the horseradish aioli. I eventually started letting him run his own team when we had multiple catering jobs on the same day. That’s not something I do lightly.

Then the nonsense began.

He started showing up late, hungover, or even still drunk from the night before. He would call in sick and then be seen partying that same night (this is a small city and and everybody knows everybody in our business). He got lazy and started taking way too many smoke breaks. One time I even saw him chatting on his phone when service was starting in 10 minutes and his station wasn’t ready.

One day he pulled a no-call-no-show.

Now, I’ve immediately axed other cooks for doing even half the things that “K” did. But for some reason this kid had gotten under my skin. Maybe I saw in him a bit of myself at that age, or maybe I thought that after all the time and effort I put into him, it would be a personal failure to let him go.

Most likely, I thought that through all of his screw-ups, he still played a role that couldn’t be replaced. I hated the idea of finding a new cook, training him, getting used to him, and rebuilding what I had with “K”.

So I sat him down for a chat. I let him know that this was the “come to Jesus” meeting and that if he didn’t shape up, he was done. He choked up a little bit and told me that he really wants this job and he promises to get his act together.

And he did. He went back to being my reliable, talented right hand. For about two weeks.

Then the lateness and laziness started all over again. I completely lost my cool this time and really let him have it. He apologized and promised to get better. And I gave him yet another “last chance”.

And again, and again, and again, until the word “last chance” stopped having any meaning at all. By this point he knew that my threats were empty and that he had free rein.

It actually took another 3 months of this before I finally let him go. And you know what happened? We got through it. The rest of my team stepped up and filled his shoes without skipping a beat and I brought on a new guy who’s doing great.

Most importantly, my crew is more motivated than ever without K’s disruptive influence. Instead of covering for somebody who’s not pulling his own weight, they can really shine.

I wish K all the best. I’m sure he’ll grow out of this phase and find success, but it won’t be with me. Mostly, I thank him for teaching me that a last chance needs to really be a last chance.

When does your staff need a long list of incredibly specific rules, and when can you trust in their innate professionalism to make the right call based on your guidelines and expectations?

My team has a RULE that raw meat can never be on the same board as veg. But we have a GUIDELINE that we prefer not to accept Euros (we’re in a country that doesn’t use the Euro but is surrounded by countries that do).

If I see a cook toss a raw chicken thigh onto a board where he’s shredding lettuce, there’s no excuse in the world that protects him from the fire and lighting I’m about to rain down on him.

But when a tourist comes straight to our food truck from the airport and she only has Euros on her, my staff isn’t going to make her walk away hungry. They know that I might not love accepting foreign currency, but I really hate disappointing customers because of slavish adherence to arbitrary rules.

This dichotomy shows up everywhere in our business:

-Do you insist that your kitchen crew wear hairnets, or do you trust them to come to work properly groomed?

-Do you use transparent trash cans to monitor waste, or have you instilled the “NO WASTE” mantra into your staff for so long that they wouldn’t dream of throwing out usable product?

-Does your floor staff have a script of how to greet each table, or do you trust their charisma and instincts and let them improvise?

There’s no right answer.

Rules can make excellent guardrails for a fast food joint with a young staff and a high turnover rate. But there’s no faster way to demotivate an experienced, professional crew than by not trusting their judgement (sometimes).